Leukocyte common antigen-related molecule (LAR) is a receptor-like protein tyrosine phosphatase (PTPase) with two PTPase domains. In the present study, we detected the expression of LAR in the brain, kidney, and thymus of mice using anti-LAR PTPase domain subunit monoclonal antibody (mAb) YU1. In the thymus, LAR was expressed on CD4(-)CD8(-) and CD4(-)CD8(low) thymocytes. The development of thymocytes in CD45 knockout mice is blocked partially in the maturation of CD4(-)CD8(-) to CD4(+)CD8(+). We postulated that LAR regulates Lck and Fyn in the immature thymocytes. Transfection of wild-type LAR activated extracellular signal-regulated kinase signal transduction pathway in CD45-deficient Jurkat cells stimulated with anti-CD3 mAb. LAR mutants, with Cys to Ser mutation in the catalytic center of PTPase D1, bound to tyrosine-phosphorylated Lck and Fyn, and LAR PTPase domain 2 was tyrosine phosphorylated by Fyn tyrosine kinase. The phosphorylated LAR was associated with Fyn Src homology 2 domain. Moreover, LAR dephosphorylated phosphorylated tyrosine residues in both the COOH terminus and kinase domain of Fyn in vitro. Our results indicate that Lck and Fyn would be substrates of LAR in immature thymocytes and that each LAR PTPase domain plays distinct functional roles in phosphorylation and dephosphorylation.